Business Case: Negotiating With Wal-Mart

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Negotiations entails sitting in round-table meetings with the purpose of reaching a common agreement, and it usually involves two or more parties. During the discussions each party expresses its concerns, but in the end a decision that is beneficial to both parties is made. This paper will focus on negotiations that took place between Wal-Mart and other related industry players in relation to globalization and technology.

Wal-Mart is a renowned retail brand name all over the world. Recently, Wal-Mart decided to partner with one of its suppliers, P&G – a company that supplied tide and pampers to Wal-Mart. The two parties are familiar with each other, but this partnership was meant to take their relationship to another level. Thus, the two companies were to work as one entity for their own benefit.

This meant that their efforts would be combined through sharing of ideas and consultations before implementing those ideas. P&G had to tread carefully in this partnership because word had gone round that Wal-Mart had led to the crash of some of its suppliers, but then P&G had to ignore the impression of the big giant and focus on the positive side. Finally, the partnership was fruitful because P&G recorded commendable increase in profits (Hanna, 2008).

From the Wal-Mart case, negotiations require the parties to communicate frequently, and technology has only come to enhance these discussions. This is because the Internet has made it possible for businesses to interact with one another like they are in close vicinity and thus, the world has been transformed into a global village (Cellich & Jain, 2004).

Walmart and P&G are in close vicinity, but even if they were miles apart the negotiations would still have occurred effectively. This is because the parties involved do not have to meet in a physical place as they can have a virtual meeting on the Internet, which enhances the concept of globalization. In essence, technologies such as video conferencing enable the different entities to communicate like they are having a face to face conversation.

Technology allows negotiations to take place with a lot of confidentiality, just like it would happen if the parties were on the same location. The Internet and telecommunication networks provide cheap and convenient platform of having the discussions. Acuff (2008) explains that this is because the parties can initiate the talks from any location if they have access to computers and the Internet.

Previously, negotiations cost the concerned parties a lot of money when they were not integrated with technology because the parties had to travel from their residential areas to the agreed destination where the meeting would take place.

In addition, the negotiations would take more time before a decision is made; whenever negotiations are in progress each party must consult its members so that when the decision is made, each party feels satisfied. This involved a lot of communication and the means of communication that were affordable included letters and phone calls, which are very expensive and unreliable.

However, the Internet provides a neutral place for parties to converge without distractions. If the location was physical, each party would struggle to suggest a location that is close to its premises so that they can save on transport costs and other expenses.

This is because such meetings do not end in one day and all the parties have to be prepared on how it will take care of its delegation with regard to accommodation and other requirements. As a solution, the virtual discussions through telecommunication systems are free from interruptions, such as civil unrests that would bar the meetings from taking place.

Moreover, negotiations are supposed to be confidential, and letters can never provide the required confidentiality. This is because as the letter moves from the sender to the receiver it is handled by different people who might manipulate the information it contains.

This can have a negative impact on negotiations because one party could be misunderstood to being ignorant. Alternatively, electronic mails are reliable because they reach their intended destination within a few minutes and are relatively cheap when compared to other means of communication.

According to Van Kleef, De Dren, & Manstead (2004), communication enables the concerned parties to get acquainted with one another. The parties will get to know each others interests and objectives by communicating. During this period the parties carry out background checks on one another. The Internet has made this task to be even much easier because someone can use the search engines like Google to find out about a company.

In the past, negotiations involving multinational companies required interpreters from each side because of the language problem, but nowadays there are software that are designed to translate speeches from one language to another.

For instance, if Wal-Mart was based in France and P&G based in Britain, each party would hear the speech in its respective language and their response would be translated to the intended audience’s language. This achievement is very commendable because it reduces the costs that would be spent on paying the translator and it contributes to the success of negotiations.

The negotiations between Wal-Mart and P&G were not as a result of any conflict and thus, none of the parties had to compromise because their relationship was meant to give them an upper-hand in the retail market. Besides, with advanced technology, the records of the minutes are kept electronically and can be easily retrieved as opposed to hard copies that are tiring and can be damaged if not properly stored.

Likewise, the negotiating parties have a wide range of consultants to choose from because they can engage other people who are knowledgeable in the conversations in real-time. Therefore, all the mentioned technological developments are meant to eliminate the differences that the negotiating parties might have.

However, the elements of agreements have not changed and therefore the concerned parties should be ready to go through various stages before the agreement is concluded. For instance, Wal-Mart had entered into an agreement previously, but the latest agreement was quite different because the breaking point was not negotiable, considering that Wal-Mart is soul reseller of P&G products.

For an agreement to take place, the concerned parties must understand the benefits and risks involved so that they do not feel like they were trapped into entering into an agreement. Each party must be willing to cooperate with the others towards a common goal.

In agreements of this nature, the parties operate as one entity, but split the benefits amongst themselves (Van Kleef, De Dreu, & Manstead, 2004). However, the benefits should be distributed according to the inputs one has invested on a given agreement. This is because some parties are good in making recommendations, but they do not know anything about implementation.

In conclusion, it is important to understand the strengths and weaknesses of negotiating parties so that one entity can identify how it is going to gain from the agreement. An agreement is never permanent because either of the concerned parties can withdraw from it if one of the parties does not adhere to the terms and conditions that the entities agreed on. These regulations are meant to normalize the behavior of partners towards one another and thus, are referred to when a disciplinary action is about to be administered.

It is important for an agreement to have its own terms and conditions because the most influential party can take advantage of its position. For Wal-Mart and P&G, the future of the agreement rests with Wal-Mart because they can terminate the agreement any time they feel like doing so. Therefore, organizations engaging in negotiations should embrace technology and the concept of globalization to enhance the processes.

References

Acuff, F. L. (2008). How to Negotiate Anything with Anyone Anywhere Around the World. New York: American Management Association,

Cellich, C., & Jain, S. C. (2004). Global Business Negotiations: A Practical Guide. Mason, OH: Thomson/South-Western.

Hanna, J. (2008). HBS Cases: Negotiating with Wal-Mart. Harvard Business School. Web.

Van Kleef, G. A., De Dreu, C. K. W., & Manstead, A. S. R. (2004). The Interpersonal Effects of Anger and Happiness in Negotiations. Journal of Personality and Social Psychology, 86, 57-76.

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Business Case: Negotiating With Wal-Mart

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